Good afternoon. Thank you for joining us today for the first full committee hearing of the 113th Congress.
The topic of today’s hearing is the debt limit, which has increased higher and faster under President Obama than any President in our nation’s history. Since the President first took office in 2009, there have been four increases in the statutory debt limit totaling more than $5 trillion – a 55 percent increase.
As of December 31, 2012, our nation reached the current debt limit of nearly $16.4 trillion, and the Treasury Department has been using “extraordinary measures” to avoid exceeding the debt limit. According to a letter from Secretary Geithner, those measures will be exhausted between mid-February and early March.
In the simplest of terms, the debt limit helps hold Washington accountable to hardworking taxpayers, who ultimately foot the bill for Washington’s spending habits. Without a limit, Washington would be free to borrow as much as it wanted, without even a review of the bills we have racked up and those that are still coming due.
Now, as I have said many times before, no one party is solely to blame. During eight years of the previous Bush presidency, deficits increased by $2.4 trillion. President Obama ran up twice that much during just his first term.
The debt is not just some number – it has a direct impact on American families. During the President’s fiscal commission, we heard non-partisan testimony that stated when the debt is this large in comparison to the economy, it costs the country the equivalent of about one million jobs. Think about that – if Washington got its debt and spending under control, one million more Americans could be working today.
As if that wasn’t sobering enough, the staggering size of our debt – and lack of a plan to deal with it – also threatens to drive interest rates up. The Fitch Ratings agency recently warned that the failure to make progress on our structural debt would likely still result in a downgrade of the U.S. credit rating. A lower credit rating is sure to mean higher interest rates, which means families will face higher credit card payments, higher car payments, higher student loan payments and certainly higher mortgage payments.
In 2006, when speaking in opposition to increasing the debt limit, then-Senator Obama said, “The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure.” Those comments hold true today. That is why it is disappointing that the President has declined to engage in a meaningful dialogue to identify a responsible, balanced approach to reducing spending, and by extension, reducing the deficit – which the President promised to cut in half during his first term.
Of course it is tough to cut the deficit when the Senate, which is controlled by the President’s own party, will not or cannot even produce a budget. It has been four years since the Democrat-controlled Senate has passed a budget. That is a disgrace.
I fully expect Republicans and Democrats will disagree about what the budget should look like. Even when one party has a majority in both the Senate and the House, the two bodies often disagree. Disagreeing isn’t the problem – the failure to resolve those differences is. And, how can we even start to find common ground if Senate Democrats won’t tell us where they stand in the first place? Having the House and Senate pass a budget is the first step towards getting our finances back in shape.
I want to thank the witnesses for agreeing to testify today and sharing their expertise on the debt, the debt limit and what it means for the country. Before hearing their testimony, I will first recognize Ranking Member Levin for his opening statement.